Beijing threatened to launch trade probes against the European Union if the 27-member bloc pushes ahead with a proposal to curb imports of heavily subsidized foreign products.
European leaders hold the view that China’s global industrial dominance is a result of decades of government subsidies and non-reciprocal market access.
Chinese authorities could initiate anti-discrimination and supply-chain security investigations into the EU’s “overcapacity instrument,” a social media account run by China’s state broadcaster said Friday.
The heating up of rhetoric comes as European officials are scheduled to hold closely watched talks on Friday to discuss ramping up the bloc’s trade defenses—a move widely seen as aimed at shielding critical industries from Chinese rivals.
European leaders hold the view that China’s global industrial dominance is a result of decades of government subsidies and non-reciprocal market access. In a joint paper seen by Dow Jones Newswires foreshadowing the talks, five EU member states including France, Spain and the Netherlands called for the bloc’s executive arm to launch more probes into potentially unfair trading practices, be proactive when disputing alleged breaches at the World Trade Organization, amend existing rules to prevent businesses from circumventing them, and allocate more resources to its trade policy unit to tackle a surge in investigations into dumping and subsidies.
The EU’s industry chief, Stephane Sejourne, also told the Financial Times and other media outlets earlier this week that Brussels would broaden the use of its trade defenses such as import quotas and tariffs in a bid to shield European industries such as chemicals and clean technology from state-backed Chinese competitors.
Analysts say the safeguards floated to shield European manufacturers from state-subsidized goods could effectively serve as a sweeping new trade-defense mechanism against China, though the proposal is still under debate among EU member states.
By empowering Brussels to cap imports and impose sector-wide tariffs, the tool would target Chinese industrial exports in key markets like electric vehicles, steel, and solar panels, according to analysts.
Yuyuantantian, the state-run social media account, said the measure is specifically aimed at China even though the EU hasn’t explicitly stated that.
“The EU’s economic and trade policy toward China is going further and further down a radical path,” it said, citing several EU moves this year including the Industrial Accelerator Act aimed at bolstering the bloc’s industrial capacity.
Over the past few years, China and the EU have exchanged several rounds of tit-for-tat retaliation against each other’s trade moves. Concerned that a flood of cheap Chinese products would crush European competitiveness, the EU has launched multiple investigations into Chinese companies.
—Xiao Xiao contributed to this article
Write to Singapore Editors at singaporeeditors@dowjones.com
